Detroit Land Bank notches many wins including 10,000 side-lot sales

Barb Matney at the Warrendale community garden she helped create on vacant lots purchased from the Detroit Land Bank Authority. Photo taken Sept. 18,2018.(Photo: John Gallagher/Detroit Free Press)Buy Photo

Few public agencies in Detroit have come in for criticism lately like the Detroit Land Bank Authority. Yet few public agencies, I'm going to argue today, have accomplished so much good in so short a span of time.

I mulled this last week at a brief ceremony in Detroit's Warrendale neighborhood on the city's west side, where the Land Bank team celebrated its 10,000th sale of a side lot to a neighborhood resident — the sale of a vacant lot owned by the city to a resident who would put it to good use.

The purchasers were Barb and Joe Matney, neighborhood activists who have long worked to improve their Warrendale area. Barb, a lifelong resident of the district, is president of the local neighborhood association. She has purchased nine vacant lots from the Land Bank to create a community food garden, with a kids play lot and other improvements still to come. The food grown in the community garden goes to those who need it.

“We found out about four years ago that the houses here were going to be demolished," Barb Matney said at the ceremony. "And we had seen families knocking on doors begging for food and we said that’s unacceptable. So from the time we knew these houses were going to be demo’d, we knew this was what we were going to do.”

Such milestones as 10,000 side-lot sales have not done much to still the criticism of the Land Bank. In a few short years of its existence, the agency has seen some tumultuous ups and downs.

Critics of the Detroit Land Bank have chided the agency for not pushing out its vast inventory of tax-foreclosed houses for sale more quickly. And the Land Bank went through a rocky period initially as its saw a series of executive directors depart before current Director Saskia Thompson took over about a year ago.

Thompson is a Detroit native and graduate of Cass Tech who worked in then-Mayor Dennis Archer's administration, later took municipal jobs in Atlanta and Philadelphia, and then returned to Detroit to run the Land Bank.

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Saskia Thompson, executive director of the Detroit Land Bank Authority, photographed Sept. 18, 2018 at the Warrendale neighborhood community garden, which was created on vacant lots purchased from the Land Bank.(Photo: John Gallagher/Detroit Free Press)

Most troubling of the issues, Detroit's demolition program to remove blighted structures came under intense criticism beginning a couple of years ago over allegations of bid-rigging and collusion in awarding demolition contracts. The Detroit Land Bank as well as the Detroit Building Authority play key roles in organizing the demolition efforts.

The FBI has been looking at how city and Land Bank processes could have caused the per-house price of removal to soar. The investigation is believed to be continuing, but no findings have been released.

Speaking at the Warrendale ceremony last week, Thompson admitted the Land Bank's missteps, but she said the mistakes were due to creating a whole new program to reclaim vacant and abandoned urban land at an unprecedented scale.

"Of course we’re not going to do everything right," she said. "We’re working on a model that’s never been done anywhere else. We’re going to have some hiccups along the way. But on balance these last four years it really has been a tremendous success."

Some history

The modern land bank model in the U.S. got started in Flint in the early 2000s when Dan Kildee, then the Genesee County treasurer and now a U.S. congressman, set up the Genesee County Land Bank to offer a new way to deal with tax-foreclosed property.

All cities acquire vacant and abandoned parcels due to tax foreclosure and other problems. Detroit by far has the most of any major city because of its troubled history. These parcels come with all sorts of problems, including clouded titles that make it difficult to resell the properties to new users.

For many years in Detroit, it was difficult or impossible to buy a vacant lot next to one's home or even to find out who owned some parcels, so entangled was the bureaucracy.

Dan Kildee stands outside the remodeled Berridge Hotel in Flint in December 2009. The longtime Democratic politician, who helped create the Genesee County Land Bank in 2002, says the new center's Flint office appropriately will occupy space in a historic downtown hotel that the land bank helped bring back from the brink. (Photo: Carlos Osorio, AP)

In Flint, instead of auctioning to speculators the parcels seized for unpaid property taxes, as most counties including Wayne County do, Kildee began to transfer title of such property to the Genesee County Land Bank, a new legal entity he had set up. Then the Genesee Land Bank, which Kildee also headed, sold the more valuable parcels in negotiated sales to raise money, and used the cash to fix up blighted properties in Flint itself.

Among other milestones, the Genesee County Land Bank help renovate the long-vacant Durant Hotel in downtown Flint, as well as greening vacant lots, demolishing abandoned houses, and creating pocket parks where once there was only vacancy.

So effective was the Flint land bank effort that an early Michigan State University study estimated that the land bank's cleanup activities in Flint had boosted property values countywide by more than $100 million. And the Kennedy School of Government at Harvard University named the Flint land bank the winner of its 2007 Fannie Mae Foundation award for urban innovation.

The idea began to spread nationwide. Dozens of U.S. cities large and small now have some form of land bank.

Detroit’s City Council initially rejected creation of a land bank out of reluctance to give up control of city-owned parcels to an independent agency. In 2008, Council finally agreed to create a weak Detroit Land Bank Authority, but it wasn’t until Mayor Mike Duggan took office in 2014 and sought to empower the Land Bank that Council finally agreed to transfer the city's 50,000 or so vacant parcels into Land Bank control.

Since then, property tax foreclosure and other trends have boosted the Detroit Land Bank's inventory to about 95,000 parcels today — more than one-fourth of all the individual parcels in the city. It is the largest such inventory of publicly held land of any city in the nation.

The inventory includes vacant lots — tens of thousands of them — plus many abandoned and some still-occupied houses, old industrial buildings and other parcels taken by public authorities for nonpayment of property taxes.

How it works

Perhaps most important, the Detroit Land Bank, like those in other cities, has the power to clear title to its parcels of liens and other encumbrances that would normally inhibit a resale.

With titles cleared, the Land Bank began to push out its parcels to the public for productive reuse. The biggest success so far probably has been its side-lot program. Not so long ago, neighbors would try in vain for months or years to buy the vacant lot next to their homes from the city. The Land Bank eased the process, making it possible for a residents to buy a vacant lot next to their property for just $100.

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Keith Crispen, left, and Timothy Paule, both of Detroit, started a non-profit called Detroit Hives that transformed a vacant lot on the east side of Detroit to a bee hive and future farm. They are photographed on the property they received through the Detroit Land Bank Authority in March 2018.(Photo: Kimberly P. Mitchell, Detroit Free Press)

City Council member Gabe Leland, who represents the Warrendale neighborhood, recalls that he was “a little big cautious” five years ago when Duggan asked Council to transfer 50,000 properties owned by the city to the Land Bank. But the performance has dispelled those doubts.

“I did that (transfer) with a decent amount of reservation, but what we have today, the 10,000th side lot sale, is pretty impressive,” he said at the ceremony in Warrendale.

Many ways to buy land

Among the Detroit Land Bank's other programs:

Auctions. The Land Bank auctions four houses every day online from its website, buildingdetroit.org. Bidding on one of the properties starts at $1,000 at 9 a.m. and concludes at 5 p.m. The highest bidder gets the property.

Own It Now. In this program, a potential buyer picks from among hundreds of properties offered on the website and places an offer. If after 72 hours from the first offer placed a bidder is the highest, he or she can buy the property.

For both the auction and Own It Now properties, buyers have six months after closing to rehab and occupy the property or it reverts to the Land Bank.

BuyBack. This is a new program designed to help occupants of properties that come to the Land Bank by way of property tax foreclosures.

Some landlords will collect rent but not pay property taxes, so foreclosure leaves their tenants facing eviction. The BuyBack program allows renters or owners living in the property prior to foreclosure who complete homeownership classes and make monthly deposits to cover the property taxes to buy the home for $1,000.

Measuring success

Beginning in 2014, when Detroit Land Bank organized on its current model, it has auctioned 1,866 houses, sold 1,906 properties through the Own It Now program and closed on about 500 BuyBack sales, in addition to then 10,000 side-lot sales.

Land Bank attorneys have also aggressively pursued nuisance abatement cases against owners who fail to keep up their properties. And the Land Bank has done a lot of the prep work for the city’s blight removal program that so far has included more than 11,000 demolitions.

Taken all together, the Land Bank has achieved something — auction, side-lot sale, demolition, etc. — on close to 25,000 properties in the city. That’s impressive — even if it still leaves almost 75,000 more to go.

What's next?

The huge backlog of Land Bank properties yet to be sold or improved has led to criticism of the agency for not moving faster. But Thompson rejects such criticism, particularly the idea that it should be selling houses it holds more quickly.

"It’s true that the pace is slower that people would like," she said. "But we are 100 percent of the market in some neighborhoods. We could make 100 percent of the market available, but it just wouldn’t sell. And what we are doing then is causing a different kind of problem for people who are investing in the neighborhood. So we try to be really strategic about this."

Or as Barb Matney, the Warrendale community activist, put it last week at the ceremony celebrating the Land Bank's 10,000 side-lot sale, "Everybody can get aggravated. They can say I want it to happen right now. Just learn the process, understand that they’re doing whatever they can and it’s going to get done as quickly as possible.

"Because the city doesn’t want these lots either. They want people to get them and do something with them … It’s been a really good experience.”

In the broadest sense, the Land Bank’s achievements give hope that urban problems really can be solved. If a challenge as intractable as Detroit’s vacant and abandoned land can yield to innovation and commitment, perhaps all the city’s ills will so yield.

So that’s the takeaway: Keep calm and carry on.

Contact John Gallagher: 313-22-5173 or gallagher@freepress.com. Follow him on Twitter @jgallagherfreep.